Sensex Ends Lower After Posting Record High Last Week

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, reversed gains and traded 0.1 percent lower at 11,021.50 as of 7:30 a.m.

Asian stocks began the week in a mixed fashion as traders assessed the sustainability of last week’s relief rally ahead of a slew of Chinese economic figures. Crude declined.

Equities in Sydney fell, while shares in South Korea were gained in early trading. Japan is shut for a public holiday.

• West Texas Intermediate crude declined 0.5 percent to $70.66 a barrel.
• Brent crude traded 0.4 percent lower at $75.04 per barrel.
• Gold fell 0.2 percent to $1,241.73 an ounce.

Shanghai Exchange

• Steel snapped five-day winning streak; down 0.4 percent.
• Aluminium traded lower for second day; down 0.3 percent.
• Zinc snapped four-day losing streak; up 0.6 percent.
• Copper traded higher for third day; up 0.3 percent.
• Rubber traded lower for second day; down 0.1 percent.

• France crowned 2018 FIFA World Cup champions! Croatia beaten 4-2.
• Lodha Developers may launch IPO this month.
• National Green Tribunal plans to conduct hearings through video-conferencing.
• Ola may now take one more year to turn profitable.
• Card usage grows, payments get smaller.
• India refuses to share Facebook’s response on Cambridge Analytica.
• Housing and urban development benefit from shift in states’ social spending.
• PM Modi should control clumsy propagandists before they do more harm.
• Pakistan raises rate most since 2008 as economic pressure builds.
• Pakistan’s army fights the wrong battle
• Trump lashes media, says he'll inevitably be criticised on Putin.
• How a $139 billion fund is trading the trade war.
• Airbus near blockbuster $23 billion jet sale to AirAsia.
• Huawei may beat Samsung to 5G in its own backyard.
• Facebook makes moves on Instagram’s users.

Here are some key events coming up this week:

• Economists forecast China will report second quarter GDP growth slowed to 6.7 percent from 6.8 percent in the previous quarter, a result that could underscore concerns that the spat with the U.S. is already starting to have an impact on the world’s biggest trading nation.
• Earnings season continues with reports due from companies including: Bank of America, BlackRock, Goldman Sachs, Morgan Stanley, American Express, Netflix, Microsoft, Taiwan Semiconductor Manufacturing, Unilever, Johnson & Johnson and IBM.
• U.S. President Trump and Russian President Vladimir Putin hold their first summit together.
• Fed’s Powell delivers the semi-annual Monetary Policy Report to the Senate Banking Committee and answers lawmakers’ questions.

• Infosys announced 1:1 bonus issue.
• Indivior won preliminary injunction against generic rival Dr. Reddy’s for Suboxone.
• PC Jeweller withdrew buyback offer as it does not get NOC from bankers.
• Moody’s downgraded credit rating of Tata Motors by one notch due to weaker consolidated credit matrix.
• Just Dial to consider buyback of equity shares on July 20.
• WABCO signed first power steering system export deal in India to supply Tata Motors.
• Vedanta identified as “H1 Qualified Interested Bidder” for GMR Chhattisgarh Energy Ltd by consortium of lenders.
• Cochin Shipyard won shipbuilding contract from Inland water Authority of India worth Rs 102.6 crore.
• HMT transferred remaining seven acres of land at Tumkur to ISRO.
• HDFC MF received SEBI go ahead for IPO (Economic Times).
• BK Birla group company Kesoram may demerge ailing tyre business (Times of India).
• Aurobindo Pharma to acquire Apotex International Inc.’s commercial operations in five European countries for € 74 million.
• Sterlite plant closure to hit 2-3 percent profit of Vedanta group (Business Standard).
• Dalmia Bharat eyes acquisition as Binani Cement fate hangs in balance (Business Standard).
• Jindal Steel & Power has settled dispute with Zee Media. Both the parties have withdrawn the allegations against each other.
• Supreme Court to hear Jaiprakash Associates’ matter today regarding the purpose of considering the issue of the rights of the home buyers and the capability of JAL and JIL to construct the projects.

Infosys (Q1, QoQ)

• Revenue up 6 percent at Rs 2831 crore.
• Net profit down 2 percent at Rs 3612 crore.
• EBIT down 1 percent at Rs 4537 crore.
• Margin at 23.7 percent versus 24.7 percent.

Also Read: Q1 Results: Infosys Profit Misses Estimates In June Quarter

Bajaj Corp (Q1, YoY)

• Revenue up 12 percent at Rs 221 crore.
• Net profit down 2 percent at Rs 54 crore.
• Other Income of Rs 11 crore in base quarter
• EBITDA up 15 percent at Rs 68.5 crore.
• Margin at 31 percent versus 30.2 percent.

BEPL (Q1, YoY)

• Revenue down 10 percent to Rs 202 crore.
• Ebiitda down 7 percent to Rs 27.5 crore.
• Margin at 13.6 percent versus 13.2 percent.
• Net profit down 0.7 percent to Rs 16.8 crore.
• Company dropped its capacity expansion to 137 KTPA plans.
• Aims to achieve 75 percent capacity utilisation for 2018-19 with 100 KTPA plant.

DCB Bank (Q1YoY)

• Net interest income up 17 percent to Rs 273 crore.
• Net profit up 6.6 percent to Rs 69.5 crore.
• GNPA up 8.6 percent to Rs 400.6 crore (QoQ).
• NNPA up 5 percent to Rs 154 crore (QoQ)
• GNPA ratio at 1.86 percent versus 1.79 percent.
• NNPA ratio at 0.72 percent versus 0.72 percent.

CCL Products (Q1, YoY)

• Revenue up 22 percent to Rs 218 crore.
• Ebitda up 26 percent to Rs 42 crore.
• Margin at 19.2 percent versus 18.5 percent.
• Net profit up 17 percent to Rs 24 crore.

Earnings To Watch:

• Hindustan Unilever
• Jay Bharat Maruti
• Sintex Plastics Technology

• Solara Active Pharma Sciences: Reliance Strategic Investments sold 1.36 lakh shares at Rs 150.24 each.

AU Small Finance Bank

• Kotak MF bought 36.5 lakh shares 1.3 percent equity at Rs 630 each.
• International Finance Corporation sold 1.20 crore shares or 4.2 percent equity at Rs 630 each.

Godrej Properties

• Jasmine Capital Investments PTE bought 21.96 lakh shares or 1 percent equity at Rs 704.35 each.
• Cinnamon Capital sold 21.96 lakh shares or 1 percent equity at Rs 704.35 each.

Prestige Estates

• Jasmine Capital Investments PTE bought 39.46 lakh shares or 1.1 percent equity at Rs 262.6 each.
• Cinnamon Capital sold 39.46 lakh shares or 1.1 percent equity at Rs 262.6 each.

F&O Cues

• Nifty July Futures closed trading at 11,020 premium of one point versus discount of seven points.
• July series-Nifty OI unchanged & Bank Nifty OI down 3 percent.
• India VIX ended flat at 12.3, down 1.2 percent.
• Max OI for July series at 11,000 Call, OI at 33.2 lakh, OI down 13 percent.
• Max OI for July series at 10,600 Put, OI at 50.3 lakh, OI down 2 percent.

F&O Ban

• In Ban: Jet Airways
• New in Ban: None
• Out of Ban: None

Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of a rollover of these intraday positions.

Put Call Ratio

• Nifty PCR at 1.79 versus 1.73.
• Nifty Bank PCR at 1.00 versus 1.10.

Brokerages On Infosys

Motilal Oswal

• Maintained ‘Buy’ with a price target of Rs 1,550.
• June quarter’s constant currency revenue growth came in-line with estimate
• Strong growth seen in energy and manufacturing on a yearly basis.
• Though guidance retained, expect better margins.
• Deals and Digital are positives; Concerned on attrition and BFS sector
• Infosys will achieve the lower end of its guidance in 2018-19.

Investec

• Maintained ‘Buy’; raised price target to Rs 1,440 from Rs 1,320.
• Margin performance drives upgrades.
• Commentary suggests better growth going forward.
• Weakness in BFSI is likely over.
• Assume marginal narrowing of valuation gap with TCS.

Citi

• Maintained ‘Neutral’; raised price target to Rs 1,315 from Rs 1,285.
• Largely inline Q1 revenues and EBIT margins.
• Flattish BFSI and high attrition are key concerns.
• Stock to be supported by sector sentiments, pending capital return and bonus announcement.

Investec on UPL

• Maintained ‘Buy’; Cut price target to Rs 785 from Rs 1,050.
• Share prices decline on depreciating Brazilian Real and on news around Arysta acquisition.
• Investors concerned regarding the valuation of the potential deal.
• Current price factors in the possible risks from such a deal.
• UPL’s conservative approach to acquisitions in the past provides assurance.
• Lower price target to factor heightened volatility in business environment and multiples of global generic agrochem peers.

Nomura on Dr. Reddy’s

• Maintained ‘Buy’ with a price target of Rs 2,704.
• Preliminary Injunction (PI) in favour of Indivior and against Dr Reddy's.
• Dr. Reddy’s appeal on PI verdict will take 2-6 months.
• PI would adversely impact as competition could intensify for drug.
• Attribute Rs 60 percent share for gSuboxone opportunity in price target.

CLSA on Aurobindo Pharma

• Maintained ‘Underperform’ with a price target of Rs 630.
• Further inorganic expansion in the EU.
• EV to previous fiscal sales multiple appears low but there is limited meaning for sales multiple.
• Deal increases European exposure in total sales to 31 percent.

The Indian rupee traded lower at 68.59 a dollar after it depreciated nearly 0.1 percent. The currency was the only top performer among Asian peers last week, partly buoyed by data which showed retail inflation grew less-than-expected in June.

Indian equity benchmarks fluctuated in the open after gains in HDFC twins countered losses in ICICI Bank Ltd.

The S&P BSE Sensex Index traded a little changed at 35.540 as of 9:17 a.m. The NSE Nifty 50 Index traded 0.1 percent lower at 11,007.

The market breadth was tilted in favour of sellers. Nine out of 11 sectoral gauges compiled by NSE fell, led by NSE Nifty Pharma Index's 1.2 percent decline. On the flipside, NSE Nifty FMCG INdex was the top sectoral gainer, up 0.4 percent.

Shares of the Bengaluru-based software developer rose as much as 2.1 percent to Rs 1,345.60. The stock was the best performer on both Sensex and Nifty.

The company’s profit missed estimates in June quarter as its margin contracted and the key banking and financial services segment underperformed. (more details here).

Key highlights from the earnings (Q1, QoQ):

• Revenue up 6 percent at Rs 2831 crore.
• Net profit down 2 percent at Rs 3612 crore.
• EBIT down 1 percent at Rs 4537 crore.
• Margin at 23.7 percent versus 24.7 percent.

Shares of the FMCG major rose as much as extended gains for the fourth day, ahead of its earnings announcement.

The stock rose as much as 1.4 percent to hit a new record at Rs 1,767.75.

Hindustan Unilever trades at 73.3 times trailing 12-month earnings per share and 61 times its estimates for the coming year, according to Bloomberg data.

Shares of the automaker extended declines for the fifth day, its longest losing streak in over two weeks. The stock fell as much as 2.9 percent to Rs 256.

Global rating agency Moody's said it has downgraded the corporate family rating on the company due to the weakening credit metrics at Jaguar Land Rover, according to a PTI report.

The stock declined 40.2 percent so far this year compared to 8 percent advance in Sensex.

Helios Capital believe that the small and mid cap correction might not be overdone and that the large-cap stocks would relatively outperform small and mid cap, its Fund Manager Samir Arora told BloombergQuint in an interaction.

Key highlights from the conversation:

• India is the only country in the world where the fund needs to pay tax.
• Have traditionally invested around 30 percent in mid-cap stocks.

Watch the full conversation:

Shares of the private sector lender fell as much as 3.3 percent to Rs 259. The bank is said to launch a second external probe on bad loans, according to a report by Economic Times.

The stock has declined 17 percent so far this year and fell 13 percent in the past 12 months. The scrip was the worst performer on Sensex and Nifty.

Shares of the engineering company parred early losses and rose as much as 6.5 percent to Rs 102.

About 1.14 crore shares changed hands in a block deal, according to Bloomberg report. Buyers and sellers were not known immediately.

Trading volume was 1,313.3 times its 20-day average, Bloomberg data showed. The stock is 35 percent below the Bloomberg one-year consensus price target.

Shares of the drugmaker fell as much as 10 percent to Rs 2,069.

A U.S. federal judge blocked the pharmaceutical company from selling a generic version of Indivior Plc's opioid treatment Suboxone film while a patent-infringement lawsuit is pending. (More details here)

The stock was the worst performer on Nifty. Trading volume was 3.9 times its 20-day average, Bloomberg data showed.

Go India Advisors expects about 15-20 percent correction in commodities going forward from current levels, its Managing Partner Rakesh Arora told BloombergQuint in an interaction.

Key highlights from the conversation:

• Slowing Global growth since January led to the muted demand for commodities.
• Suggest staying away from the metal space in light of global uncertainty.
• Trade war adding to the global uncertainty is further weighing on the commodities.
• Steel prices to continue to deliver a good show.
• Steel prices to continue to deliver the good show in June quarter.
• Steel companies to perform better than base metals from July.
• Expect June quarter to remain strong for all metal firms.
• Government's supportive measures towards steel industry might aid these companies.
• A bull run for cement companies unlikely for 2-3 years.
• Don't see dynamics changing for the cement industry.
• Valuations for cement companies remain high.

Jindal Steel And Power Ltd. plant to reduce about Rs 7,000-8,000 crore debt this financial year, its CEO NA Ansari Told BloombergQuint in an interaction. The company's current Global debt stands at Rs 42,000 crore and Indian debt stands at Rs 21,000 crore, he added.

Key highlights from the conversation:

• Not interested in bidding for coal mines simply for business reasons.
• Will look at bidding if mines are close to power plants and make logistical sense.
• Bidding for coal mine will depend on a case-to-case basis.
• Most companies in the country are suffering because coal is not available.
• There will be no financial implication of the case.
• Do not think the company has done anything wrong.
• Have followed all procedures with the government.
• JSPL has faced no issues despite the coal scam case.

Shares of the jewellery maker fell as much as 30 percent to trade at over a four-year low at Rs 83.95.

The company withdrew its Rs 424-crore share buyback offer with immediate effect after the company failed to receive the requisite no-objection certificate from its bankers, according to its stock exchange notification.

The Relative Strength Index was 22, indicating that the stock may be oversold. The scrip traded at 4.7 times estimated forward earnings per share compared to 18.8 times for the two-year historical average.

The NSE Nifty Pharma Index was the top sectoral loser on National Stock Exchange. The Index fell 2.4 percent, weighed by Dr. Reddy's Lab.

Indian equity benchmarks traded off-day's low with Infosys as the top performer.

The S&P BSE Sensex Index traded 0.2 percent lower at 36,479.556 as of 12:10 p.m. while the NSE Nifty 50 Index traded at 10,982.35, down 0.3 percent.

The market breadth was tilted in favour of sellers. About 1,384 stocks declined and 308 shares advanced on NSE.

India’s wholesale price-based inflation, measured by the Wholesale Price Index, stood at 5.77 percent in June, according to the data released by Ministry of Commerce and Industry. (more details here)

Shares of the Mumbai-based lender fell as much as 11 percent the most in nearly three years to Rs 159.50. The bank reported its June quarter results during the weekend.

Key earnings highlights (Q1, YoY):

• Net interest income up 17 percent to Rs 273 crore.
• Net profit up 6.6 percent to Rs 69.5 crore.
• GNPA up 8.6 percent to Rs 400.6 crore (QoQ).
• NNPA up 5 percent to Rs 154 crore (QoQ)
• GNPA ratio at 1.86 percent versus 1.79 percent.
• NNPA ratio at 0.72 percent versus 0.72 percent.

About 13.4 lakh shares of Muthoot Finance changed hands in a single block, according to Bloomberg data. Buyers and sellers were not known immediately.

The ‘Sashakt’ recovery roadmap envisages setting up of a loan trading platform which can be used for bad loan trading.  (more details here).

Key highlights from the conversation:

• Petroleum imports increased, exports fell.
• Some refineries not functioning at full capacity.
• Domestic output in steel sector running at near capacity.
• Composition of imports might put pressure on fiscal deficit.
• Demand for gems and jewellery, gold lower than ever.

Shares of Bhansali Engineering Polymers Ltd. fell as much as 4.9 percent to Rs 128.20. The company reported its earnings for April-June quarter on Saturday.

Key earnings highlights (Q1, YoY):

• Revenue down 10 percent to Rs 202 crore.
• Ebitda down 7 percent to Rs 27.5 crore.
• Margin at 13.6 percent versus 13.2 percent.
• Net profit down 0.7 percent to Rs 16.8 crore.
• The company dropped its capacity expansion to 137 KTPA plans.
• Aims to achieve 75 percent capacity utilisation for 2018-19 with 100 KTPA plant.

The LIC’s board today has approved acquiring 51 percent stake in state-run IDBI Bank Ltd., Secretary of Department of Economic Affairs Subhash Chandra Garg said. (more details here)

Here's what analysts and experts had to say on LIC-IDBI deal:

Hemindra Hazari, Banking Analyst:

• LIC to get gains from IDBI Bank sale in the future and not the government.
• Not appropriate to let LIC run IDBI Bank when LIC Housing Finance was denied a banking licence earlier.

JN Gupta, Former executive director at SEBI:

• Nothing wrong if LIC investment committee thinks this deal is in favour of LIC policyholders.

Key highlights from the conversation:

• Balances equity stake to be purchased in German company.
• For phase-1, capex will be around Rs 100-120 crore.

Shares of the Anil Ambani-led firms declined in today's trade.

European equities opened little changed as investors mulled the impact of trade tariffs on global growth and as President Donald Trump branded the European Union a “foe.”

SML ISUZU

• Stock fell as much as 9.7 percent to Rs 718.30.
• Trading volume was 11 times its 20-day average.

IG Petrochemicals

• Stock fell a smuch as 16.5 percent to Rs 427.05.
• Trading volume was 4.8 times its 20-day average.

Jindal Stainless Hisar

• Stock fell as much as 11.5 percent to Rs 124.
• Trading volume was 2.6 times its 20-day average.

Tata Steel

• Stock fell as much as 7.1 percent to Rs 519.
• Trading volume was 1.3 times its 20-day average.

Indian equity benchmark S&P BSE Sensex Index ended lower after posting record high last week. The benchmark indices in India today followed its Asian peers after mixed economic data out of China spurred declines.

The 31-stock Index closed 0.6 percent lower at 36,323.77 while the NSE Nifty 50 Index closed at 10,936.85, down 0.7 percent.

The market breadth was firmly tilted in favour of sellers. 10 out of 11 sectoral gauges compiled by NSE fell, led by NSE Nifty Pharma Index's 4.3 percent decline. On the flipside, NSE Nifty IT Index was the top sectoral gainer, up 0.6 percent.